Rakesh Jhunjhunwala buys stake in Firstsource as Temasek, ICICI Bank exit

Billionaire investor Rakesh Jhunjhunwala has picked up 3.8 per cent stake in public listed BPO firm Firstsource Solutions Ltd as Singapore sovereign wealth fund Temasek and private sector lender ICICI Bank look to exit their investment. Jhunjhunwala picked up the stake for Rs 25 crore on National Stock Exchange on Thursday.

The deal comes after the RP-Sanjiv Goenka Group acquired a majority stake in Firstsource Solutions last year.

Temasek has mostly exited with this transaction, selling over 20 million of its 22 million shares it held at Rs 10.01 apiece. ICICI Bank sold 13 million shares at Rs 10 per unit. Temasek, through Aranda Investments (Mauritius) Pte Ltd, held 3.35 per cent before this deal while ICICI Bank held 6.88 per cent stake.

With this, Temasek has exited its nearly decade-old investment at over 50 per cent loss. The firm had invested around $45 million in the company during 2004-2006. Its average acquisition cost of shares is pegged at over Rs 22 a share so it is exiting at below half the cost.

Shares of Firstsource shot up 19.92 per cent on Thursday to hit Rs 11.62, giving the firm a market capitalisation of Rs 765 crore.

Firstsource reported a 25 per cent increase in revenues to Rs 2,818.5 crore with 136 per cent rise in net profit to Rs 146.6 crore.

RP-Sanjiv Goenka Group, through a subsidiary of public listed power generation firm CESC, acquired 57 per cent stake in Firstsource for Rs 460-470 crore late last year. The deal was done through CESC’s wholly owned arm Spen Liq Pvt Ltd.

This would be the second time within a year that Jhunjhunwala has bought stake from a PE investor looking to exit a listed company. In October last year he bought a stake in DB Realty from Trinity Capital Plc.

(Edited by Joby Puthuparampil Johnson)

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